US Air to merge prop-plane ops

Piedmont Airlines set to take over Allegheny Airlines

By

AugustCole

SAN FRANCISCO (CBS.MW) -- US Airways plans to fold its Allegheny Airlines subsidiary into its Piedmont Airlines unit but could go as far as to liquidate Allegheny if a merger doesn't work out, the carrier said Wednesday.

Allegheny and Piedmont operate 41 turboprop aircraft each, and after the merger Piedmont would have all 82 aircraft -- the 37-seat Dash-8 twin-engine plane used to fly short routes -- under its control.

If that fails, Arlington, Va.-based US Air said it could fold part of Allegheny's assets into the Piedmont unit and sell off the rest. Union talks are under way, the airline said, and a consensual approval is needed.

The proposed combination comes as US Air is looking at new ways to aggressively cut costs, including asset sales. See full story.

Allegheny has 1,421 workers, while Piedmont has 2,090 employees.

US Air is beginning to bring regional jets into its US Airways Express operations through PSA Airlines. But prop planes are better suited to many smaller destinations and shorter routes.

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